South Korea's Deputy Prime Minister and Finance Minister Koo Yoon-cheol announced on the 27th that the government is considering differential tax treatment for residential and non-residential properties, stating that non-residential properties may not receive the same tax benefits as owner-occupied homes. Speaking at a real estate policy public forum held at the Korea Chamber of Commerce in Jung-gu, Seoul, Koo emphasized that the tax reform is not intended to be punitive or to increase overall tax burdens, but rather to rationalize tax policy based on housing purpose and price. The statement comes amid ongoing debate over South Korea's real estate taxation system, particularly concerning multi-home ownership and housing affordability.
Koo Yoon-cheol Proposes Differential Tax Treatment for Non-Residential Properties
Deputy Prime Minister Koo stated that "we are considering fair and reasonable tax burden and tax policy based on housing prices and the purpose of housing ownership." He clarified that "housing is fundamentally a place to live, and we are paying great attention to residential stability for homes where people actually reside."
Koo noted that "when it comes to holding non-residential housing, there seems to be much debate about whether (the tax burden) should be the same as for those who reside (in their homes)." He added that "many citizens are giving opinions that non-residential properties should not receive the same tax benefits as residential ones," and that "there have been opinions that the tax burden on ultra-high-priced homes is low."
The Deputy Prime Minister emphasized that "we are also considering how to reduce the payment burden for those holding one home," and reiterated that "we are doing this from the perspective of rationalizing and normalizing the tax burden, not at all to expand the burden on citizens through taxation."
Capital Gains Tax Differentiation Considered for Multi-Home Owners
Regarding the relationship between property holding tax strengthening and capital gains tax relief, Koo stated that "we will consider (relief) for those residing in appropriately sized homes." However, he explained that "for properties held for a long time without residence and for multi-home ownership, we will consider differentiating the capital gains tax burden."
Koo added that "you asked for selling opportunities, and we will consider those aspects so that citizens do not face difficulties." He also mentioned that "regarding transaction tax and comprehensive real estate tax direction, for non-residential cases, it will be difficult to treat them the same as residential ones."
Tax Support Measures Discussed for Regional and Non-Apartment Housing
Deputy Prime Minister Koo addressed regional housing market challenges, stating "there is also the concern about how to resolve situations where people sell regional homes and move to Seoul because regional properties are not selling." He emphasized that "we are listening to citizens' voices and considering how to implement tax reform based on ability to pay and rationality."
Regarding opinions to increase non-apartment housing supply, Koo responded that "we are reviewing various tax support measures to increase non-apartment supply in consultation with the Minister of Land, Infrastructure and Transport."
FAQ
What did South Korea's Finance Minister announce on the 27th regarding property taxes?
Deputy Prime Minister and Finance Minister Koo Yoon-cheol announced that the government is considering differential tax treatment for residential and non-residential properties, with non-residential properties potentially not receiving the same tax benefits as owner-occupied homes. He emphasized the reform aims to rationalize tax burdens based on housing purpose and price, not to increase overall taxation.
How will capital gains tax change for multi-home owners in South Korea?
Koo Yoon-cheol stated the government is considering differentiating capital gains tax burdens, with relief considered for those residing in appropriately sized homes, while properties held long-term without residence and multi-home ownership may face different capital gains tax treatment. He also mentioned the government will consider providing selling opportunities so citizens do not face difficulties.
